Damned if you do and damned if you don’t!

Reading the news these days make you wonder what way to run…!

We have our next door neighbour’s tragic financial experience with the so called “over spending” and the industrial repercussion over the economic crash to keep us in fear.

I am a believer that this beautiful wonderful country is different in many ways but experts continue to relate to Canada as a default for chaos.

Our corporate bosses have done some trimming on guide lines back in July with respect to residential mortgages as well as mortgages for investment properties that will somehow keep us on our toes.

But really, it is up to us to make the difference. I know that in our so called ‘bubble’, we are more conscious and determined to get rid of debt and are more careful and shy of impulse spending. Unfortunately, this course of action is hurting numerous businesses and the many industries attached to them.

I say “everything in moderation” will always balance the outcome.

The New TD Collateral Mortgage

Much has been said about this new mortgage offered by TD Bank and yes, this concept has been available in other institutions in the past and presently.

We are all familiar with conventional mortgages; we know that with this choice we establish the amount, interest rate and amortization period. We know that if we follow a plan and keep on track, our property will be paid off at the end of this amortization.

A collateral mortgage is a loan attached to a promissory note and backed up by the collateral security of a mortgage on a property. Typically a collateral mortgage is registered as a secure line of credit, allowing the balance of the loan to float up or down depending on the customer's use.

The primary benefit of a collateral mortgage is that this promissory note goes with a lien on the property of the total amount registered and up to 125% of the property value. The client will have to qualify and may use this benefit as he/she chooses.

Having said that, PLEASE heed this red light warning:

The collateral mortgage allows "re-advancing" of principal: like a revolving line of credit. The balance can rise and very often does, with most people ignorant about the holes they are digging for themselves. Most chartered banks will not accept "transfers" of collateral mortgages especially once they are inflated with other credit cards, car loans and other lines of credit that you may have with TD Bank. There are conditions involved such as the inability to switch on renewal.

I have been a costumer of TD Bank for years and still am - no longer with my mortgage but with my daily transactions and savings plans. As a Realtor I have recommended this institution hundreds of times.

This new type of mortgage may be for you. If so, please read the fine print on the the contract or, better yet, have your solicitor do it on your behalf.

Preventive Maintenance

This blog is in direct relation to my last week's blog where I discussed how to deal with natural wear and tear. I would like to share with you this week; how to be pro-active regarding house maintenance. The following preventive measures are relatively inexpensive and usually only need to be addressed once or twice a year.

Roof: Fall and spring are good times to conduct routine maintenance on the roof, including the replacement of missing or damaged shingles or tiles and checking for signs of blistering or damage that can lead to leaks. Clear all debris from the roof and gutters, especially the valleys where it can accumulate and cause water to puddle.
Siding: Clean your home's exterior with a garden hose sprayer and mild detergent or a power washer after winter passes. Tighten loose trim and add caulk to areas with cracks and keep the elements from intruding and causing further damage to the structure.
Decks: Wash and treat wood with paint or a weatherproofing product to prevent cracking and get them in prime condition for spring and summer outdoor entertaining.
Irrigation: Check sprinkler systems thoroughly before the summer approaches to spot and fix leaks and make sure water is not spraying against the home's foundation or siding.
Basement: Watch for signs of moisture intrusion and find the source of any leaks that can lead to serious mold or fungus problems if left unaddressed.
HVAC: Change the filter in your air return as often as recommended by the manufacturer. Some types need to be replaced every one to three months, while others last six months or longer.
Dryer: Remove accumulated lint from the exhaust duct at the back of the dryer and use a long-handled brush to clear the vent that leads outside. Blockages not only impact performance, they can also be fire hazards.

Watch Out for Ordinary Wear and Tear

It's a good idea for homeowners to expect some natural deterioration and budget appropriately for repairs and improvements that are likely to become necessary given the age and condition of their home. For buyers who are considering a purchase, a property inspector can provide specific information in regards to the age of a home's most vital systems and its overall construction quality.

The hardiness of the materials used to build a home generally determine how long the components are likely to last, but the quality of the installation, intensity of use, local climate conditions and level of maintenance can all impact their actual longevity.

The repair bills for a destructive roof leak or an inconvenient appliance failure can really catch homeowners of guard, and while it may seem like a disaster at the time, standard insurance policies don't cover damage or repairs that result from normal wear and tear or lack of maintenance.

Regular upkeep can help extend the life of your home's components and save you thousands of dollars over time. Many of them are simple enough thatyou may want to do them yourself, but a handyman (please refer to my Referral Directory on my website) is only a phone call away if you find you need some help.

Higher Standards Make Good Sense

Existing government rules and Canadian banks’ underwriting guidelines function to support borrowers so they can afford to repay the mortgages. In April 2010 there were policy changes to sustain stability:

1. To help borrowers prepare for higher interest rates in the future, they must meet the standards for a five year fixed rate mortgage applicable to loans that have a lower rate and shorter term.

2. Borrowers may refinance their home to 90% from 95% in turn making it less likely that they would owe more than the property is worth should housing prices fall

3. To reduce speculation; buyers of non-owned occupied rental properties must invest 20% of the purchase price for an insured mortgage. Previously, only 5% required.

According to the Canada Housing and Mortgage Corporation’s 2010 Mortgage Consumer Survey, Canadian borrowers are predominantly mortgage savvy and confident in their purchase. 90% of first time home buyers say they made a sound decision based on a good understanding of their options and what is available to them, 81% of home buyers felt comfortable with their mortgage debt and 92% agreed that “homeownership” is a good long-term investment.

What Can I Do For You?

Before, during and after the sale...

News You Can Use; I can provide you with up-to-date information and statistics on local market conditions. These can differ substantially from what you hear in the media reports, which are often skewed to heighten drama.

Maximize Potential; Feel free to ask for specific advice on home maintenance, or suggestions for upgrades that will enhance your property's resale value.

Local Insight; I am always happy to provide information on community amenities such as parks, schools and trails or even local special events.

Let's Talk Value; Request a market analysis when you need an estimate of your home's current value for a potential refinance or for insurance, estate planning or property tax purposes. I am also available to discuss issues or new developments in the community that could affect property values.

Across The Map; I can help you or your family member secure the services of a like-minded real estate professional in another part of the country. There are many ways I can be of service to you outside of an active real estate transaction. You can consider me your source of referrals for all types of businesses, whether related to real estate or not. I have partnered with exceptional professionals who would be happy to serve you. Please visit my website and view my directory for any and all of your professional service needs.

Why I Work By Referral...

Working by referral is all about trust!! The reality is that when we are seeking any service, we are also looking for a service provider that we can trust - someone proven who comes highly recommended and is already on our side.

Relationships are more important than transactions. I know that for the most part you, the consumer, feels like real estate agents take a transactional approach to sales; identifying clients, closing the deal and then moving onto the next. I choose NOT to work this way because I believe you deserve more from the professional you decide to work with. This is why I work by referral.

Since my primary source of new business is referrals from people who know and trust me, I don't have to spend precious time prospecting and promoting myself. I can dedicate myself fully to the activities that benefit you most, and always deliver truly exceptional service.

Three things you need to know about me; Laura Gutierrez
1. You control my business! I know that I must earn your future referrals, so I aim to exceed your expectations.
2. Service continues after the sale. I devote myself to serving the needs of my clients before, during and after each sale. By this I mean, I maintain communication by sending you valuable information each month and I put a call in time to time just to catch up and see if you need anything.
3. I strive to build positive business relationships by working exclusively with people I admire and respect, and who value the service I provide.

Harmonized Sales Tax (HST)

There is little doubt it will increase costs to consumers and there are some questions about its benefits.

The argument is that the province needs to find additional sources of revenue. As we proceed further into the new millennium there will be increased demands on government budgets to pay for services that we have come to take for granted, like healthcare and old age pensions.

In the past there were items that were subject to PST (provincial sales tax) only. There were other items that were subject to GST (goods and service tax, a federal tax). There were also items that were subject to both PST and GST. Typically, PST was charged against goods and GST was charged against most services and some goods. Insurance premiums were subject to PST. The impact this had on real estate was that if someone was to purchase a property and require fire insurance, that insurance would be charged PST. It also meant that if the buyer applied for a high ratio mortgage, there would be a high ratio insurance premium and the premium would be subject to provincial sales tax. Real estate commissions and legal fees were subject to GST. New homes would be charged GST but would, in certain instances, be subject to rebate.

Now everything that was charged one or the other or both in the past will be charged both: 8% + 5%= 13% total (in Ontario). Fortunately, where there were rebates before, there will be rebates now.

As far as real estate is concerned, the tax will apply to various aspects of the transaction including real estate commissions, home inspections, legal services, high ratio mortgage insurance premiums, fire insurance premiums, etc.

Dealing With A Wet Basement

The words “wet basement” are all too-familiar to many homeowners. It has been said that more than 98% of all houses have had or will have basement leakage at some point. I can’t say enough that poor surface drainage is one of the main causes of basement leaks.

The ground should slope away from the house at a rate of one inch per foot for at least the first six feet. The evestroughing and downspout systems must also perform properly. If a downspout is ever suspected of being disconnected, broken or clogged below ground level, they should be redirected to discharge above grade at least six feet away from the house. Evestroughs should be kept clear of debris.

In the majority of cases; basement leakage can be controlled relatively inexpensively however, the presence of foundation cracks, damaged perimeter drainage tiles and a high water table or underground streams may call for more extreme corrective measures.

Sealing foundation cracks can be performed in several ways with the cost of repairs varying pending the approach: from inside or outside of the house. Excavating, damp-proofing and installing drainage tiles should be used as a last resort since it is a very expensive option; $8,000 to $15,000. An alternative is an interior drainage system at one-third to one-quarter the cost of exterior work. Where underground streams and/or a high water table are present, sump pumps are usually required.

Do Your Homework!

Yesterday I wrote about how to make the most of your real estate investment with special consideration for appearance and curve appeal. Please note that these are not the only elements to consider when building home value.

Before you buy a home; check out the area, walk the neighbourhood, talk to the local residents and visit the planning department. What kinds of future developments are planned nearby? Find out the reputation of the local school district. The police department can tell you about the crime rate. Find out what future housing projects are on the drawing board in your chosen neighbourhood. A surge in the number of home building permits could foreshadow a future excess in housing which could push values down.

The time of the year when you decide to make your purchase can affect the price you will pay. Generally, homes are more expensive during the peak buying season; spring/summer. Buyers prefer to shop when many homes are for sale. This increases their options and improves their chances of finding a house that meets their needs. However, in the spring there is more competition and a greater chance of getting into bidding wars which drive prices up. If you shop over other seasons when selection is more limited, you may find a better deal but forgo some of the amenities you wanted. In the end it is all about tradeoffs and what you value most in a home.

Make The Most of Your Real Estate Investment

We all want to purchase a home at a fair price and watch its value grow over time. The value of a home depends on many variables such as location, amenities, condition, size, craftsmanship, age and design.

The neighbourhood you buy into may have more to do with your home’s value than the dwelling itself. If you move to an area with excellent schools it could make your home more valuable when you decide to sell.

Experienced real estate professionals know that a few well-chosen improvements can add value to your home however, if you spend too much, the overall character of your neighborhood may prevent you from reaping the full reward of your investment. Some improvements are unlikely to increase home value; like a swimming pool with its constant upkeep and increased utility bills.

Keep always in mind future owners; when you select exterior paint for your home, neutral colours tend to appeal to more buyers. Remember that first impressions are very important. Making sure your front yard is clean will make a significant difference.

Home Staging Benefits

Studies show that a ‘staged home’ appeals to a larger audience, assists with a quicker sale and gives you a better return on your investment.

The services provided by these professionals include; depersonalizing your home so that more buyers can picture themselves living there and neutralizing the space through colours and often times de-cluttering the rooms. From there, the home stager will add drama where needed with accessories to give your home a more professional finish.

How a professional would stage a home varies according to how much work is needed. You will receive a list of do’s and don’ts upon your initial consultation. Should you choose to fulfill the proposed plan from the stager bare in mind it may involve renting furniture and accessories including; carpets, lamps and the right pieces to create mass appeal. There is a budget to consider my readers. Everyone has one!

No matter if you are paying for the stager’s time, (initial consultation will be covered by me as part of my services) a staged home is a sold home making it appear like a model home.

Buy First Or Sell First????

To buy or sell first…is the question!

Not an easy decision.

In today’s market many homeowners that are contemplating a move have this decision to make.

In the “ideal world” we would like to have the time to look for our next home. However until we find it we must place our home in the market, sell it at the right price and get this done soon enough to accommodate both closings at the same time. Wishful thinking! Alternatively; we would like to place the house in the market and wait until the “right offer” comes and is accepted before looking for the perfect home of our dreams. Again making it all happen at the same closing. By matching the closings you don’t have to “bridge financing” nor do you have to find a short term accommodation in turn having to place the contents of your home into storage, etc, etc.

We don’t live in an ideal world!

We are quick to make risky decisions particularly when it comes to making a move in real estate. And so…what is the best way? There is no ‘best way’!

What you should do is your research. Know that what you are looking for in your next home is available. The same goes for your existing home. Have your home ready and priced at market value. You will go through both processes with knowledge and hopefully with as little stress as possible. Be realistic, have a serious and dedicated agent representing you, be calm and carry on.

The Status Certificate

The Status Certificate is a document that can be requested by all--realtors, appraisers, buyers and sellers—in the purchase of a condominium (apartment or townhouse). It is prepared by the Corporation/ Management Office. There is a fee of $100 and it will take 10 days to prepare. This certificate will accompany all the usual documents, including: the declaration, by-laws, budget, reserve fund, financial statements, rules, insurance certificate and now a statement with the report on the number of units in the complex that management is aware are leased units (as opposed to owner-occupied units). This information might be a new factor to consider for some buyers.

Sellers should become acquainted with the contents of the Status Certificate as understanding the product being sold is important. Please pay particular attention to “Special Assessments” that should be disclosed on the listing information or written down on the actual Agreement of Purchase and Sale.

Why Do You Need a Financial Planner?

Are you overwhelmed by debt?

Are you concerned about your saving’s lack of growth?

Would you like to purchase a property whether it is an investment/vacation or your first home and don’t know how to budget for it?

Are you concerned about retirement?

Are you one of those that lives pay check to pay check?

Are you struggling with wanting to purchase big ticket items but can’t do to lack of disposal income?

Your professional advisor can help you develop a financial plan specifically tailored to you, will regularly review it with you and will make the vital updates & adjustments to keep you on track therefore meeting your unique, and ever-changing needs.

Your financial plan is all about you! The annual review is all about keeping your plan, for life, on track so you can financially achieve all of your goals. Keep in mind that a complete financial plan should encompass many elements including your overall financial goals, your current and projected wealth, your current savings and budget requirements and your registered & non-registered investments.

If you have any further questions regarding this matter, feel free to contact Ivy Arellano at;

Ivy Arellano

Ivy.arellano@investorsgroup.com

(905) 306-0031

The Ever Wrong Mistake When Pricing Your Home!

A delicate touchy subject for sure!!!

You must detach yourself for a short period of time while looking at your biggest asset; your home and of course taking a closer look at sales of comparable homes in your immediate neighborhood.

One common mistake is to expect the price to reflect the expenses you incurred when you purchased your home e.g.; Land Transfer Tax, legal fees etc. The potential buyer of your home will have to pay for those expenses and as a result he/she is not responsible for your share of them.

Another mistake is to build your price based on the improvements accomplished over the years during which time you had the use and enjoyment of the house.

Last but no least, don’t over price your home thinking you can always bring the price down…a capital error! Purchasers loose respect for overpriced listings and statistically these homes “sit” in the market the longest and not always sell for market value.

Multiple Offers/ Bidding War

Multiple offers used to happen in neighbourhoods of demand with very little inventory; more bidders than homes available. Today it’s a very common experience. In fact, it seems to occur at every single transaction in every single “hood” at least on the first couple of entry levels. It is an emotional roller-coaster for the buyers, where “money” talks. Conditions are wiped off and the elected winners are left thinking: Did I pay too much?

A more serious problem arises when applying for the mortgage on a firm transaction. You better have everything in your life 100% clear or you may face legal consequences if you can’t fulfill the promise to buy. The same goes for the condition of the home, since now you don’t have any protection from a home inspection. I hope that your initial inspection with your agent left you with complete confidence as to the condition of the home. I hope that you have enough savings to cope when the unknown surfaces.

Above all I feel for all of you, my dearest “first time buyers”. Not only do you have to deal with all the fears of such a financial commitment but now you have to buy in a rush; no time for thinking or sleeping on it, no time to make sure if it is the right home for you.

The Competition Act and Real Estate

The topic on the table for a while now is that some people feel the consumer is being “short changed” by the fact that Realtor (through our regulators) don’t allow them into our bank of property information depriving homeowners of the ability to list their own properties and deal with their own sale without the assistance of Realtor.

Sure some of you may feel there is a conflict of interest here, but those of you who know me also know that I am a fair individual, educated and experienced. We live in a sophisticated world. We take vaccinations for flues and colds. We visit our physician regularly; we don’t auto prescribe. Most of us don’t even change a tire when needed; we let the professionals do it. If affordable, we don’t even look after our own yards, we let the experts do it.

And so my question is: What makes homeowners believe that selling their most valuable investment, for most of us, will be a simple endeavor?

Realtors deal with people of all kinds of different values, ethics and behaviours; we are constantly exposed to fraudulent acts, which shock us every time, even though we’ve learned how to anticipate them and protect the homeowner from these…How can homeowners willingly gamble this precious treasure on the luck of the draw?

Naturally, this applies to choosing your Realtor as well. It’s just as important to choose the right agent, someone you can trust to have YOUR best interests at heart and negotiate on your behalf. That’s the best way to guarantee a successful transaction.

Welcome to my blog!

Welcome to my Blog!

With each blog, I invite you to stay informed by keeping up to date with the current trends in the Real Estate Market. I will be addressing not only potential Buyers and Sellers but also Investors, while giving you the opportunity to share your thoughts and concerns on this topic.

Did you have to renew your mortgage lately? Did you notice the additional questions/documents required? Do you know that there is no ‘0% down payment’ available? We are back to the minimum requirement of 5% down and now there are talks of increasing this figure to 10%. These changes are not directly related to the current sluggish economy but rather due to the overly extended amount of fraudulent mortgages.

You may be approved to purchase a home/condo by an institution and yet be declined at the last minute if any of the information provided is not absolutely clear and correct. Make sure to work with a renowned professional. Should you need a referral, just ask me!

Here is some good news for you, my readers; a conventional mortgage is now down to 80%.